Fed Maintains Interest Rates Amid Economic Uncertainty

The Federal Reserve has decided to keep the federal funds rate steady at 4.25% to 4.50%, citing increased economic uncertainty and a downgraded growth forecast. Projections now anticipate 1.7% GDP growth for 2025, down from the previous 2.1% estimate, with inflation expected to rise to 2.7%. Fed Chair Jerome Powell emphasised a cautious approach, highlighting challenges in assessing inflation impacts from tariffs and other policy factors. 

U.S. retail sales experienced a modest uptick, reflecting the complex economic landscape. According to the U.S. Census Bureau, retail and food services sales rose by 0.2% to $722.7 billion, following a revised 1.2% decline in January. Year-over-year, sales saw a 3.1% increase compared to February 2024.

Australia's labor market experienced a notable shift, with employment decreasing by 52,800 positions, contrary to expectations of a 30,000 job increase. Despite this decline, the unemployment rate remained unchanged at 4.1%, as reported by the Australian Bureau of Statistics.

Ongoing conflicts in Ukraine and the Middle East continue to affect global markets. In Ukraine, discussions about the Zaporizhzhia nuclear plant have surfaced, with President Volodymyr Zelenskyy confirming no talks with President Donald Trump regarding U.S. ownership, though U.S. involvement in modernisation efforts is being considered.  In the Middle East, U.S. forces targeted Houthi positions in Yemen, and Israel resumed military actions in Gaza, disrupting a cease-fire agreement. These developments have contributed to fluctuations in oil prices, reflecting concerns over potential supply disruptions. 

The S&P 500 has experienced significant fluctuations recently. After a notable decline, the index is showing small signs of recovery, however after following such a significant drop of around 10% to secure a 2% increase barely suggests a full recovery is underway. This kind of recovery is more inline with a dead cat bounce.

Gold continues to serve as a safe-haven asset amid economic and geopolitical uncertainties. Gold is now pushing upwards, currently sitting at $US3044.

Market Snapshot

• Gold – $US3044
• Silver – $US33.50
• US500 – 5656
• ASX200 – 7912
• AUD/USD – 0.63

Market Indicators to Watch

• China GDP Growth Rate – Announced on Friday, 21 March 2025, at 1:00 pm AEST, indicating the health of Australia's largest trading partner.

Gold Futures Technical Analysis  

Technical indicators for Gold Futures suggest a STRONG BUY on both monthly and weekly analyses.  

Technical Indicators - Monthly Projections  

Summary for Monthly Forecast: Strong Buy  

*Not financial advice; please conduct your own research before making any investment decisions.*